Whether you’re buying or selling a home, it’s good to know how the value is determined. Home size is a key factor, but there are many external factors you may be surprised to learn are major influences on pricing. Read on to see an overview of what impacts a home’s value.

1. Location

Where the home is at and what the area is like is one of the most important factors in determining value. An area with a low crime rate and good school system is more valuable than the opposite.

Additionally, being a convenient distance from modern amenities has an effect. Having grocery stores, shopping centers and staple franchises like Starbucks or Trader Joe’s nearby all add to home value. Easy access to highways is also a significant factor for commuters.

2. Market Comparables

More granular than location is the value of homes comparable to yours in your neighborhood. What similar houses in your area have sold for is one of the first things appraisers will look at and will establish the base price of your home.

Outside of the property itself, the quality of your neighborhood can affect value. A well-maintained neighborhood will make homes in that area more valuable.

3. Home Size and Usable Space

Many buyers will determine the amount of home they can purchase by the square footage. What you do with that square footage is also important, both in the layout and the usability of the space. An open floor plan is more desirable than a more niche one. Regarding usability, the value decreases if a good chunk of the square footage is not able to be lived in. Unusable spaces are things like garages, attics or unfinished basements.

4. Age and Condition

On average, the newer the home, the more valuable it is. Buyers don’t want to have to replace rusting plumbing a year after they move in. However, an older home that’s in good condition could have a similar value to a brand new home.

5. Upgrades

Most upgrades you make to the home, such as an updated kitchen or hardwood flooring, will add value. However, it is possible that an upgrade can be detrimental if it’s not something that nearby homes have, like a home theater. On the flipside, if the home doesn’t have similar upgrades to the houses in the area, it could decrease the value as well.

6. Supply and Demand

Supply and demand for houses in your area has a big effect on value. In what’s called a seller’s market, homes are more in-demand, so they have more value. In a buyer’s market, however, they’re not as much of a hot commodity, thus lowering the value.

To truly determine the price of a home, an experienced real estate agent can help you find out exactly what your home’s value, or, if you’re shopping, can help you find exactly what you’re looking for your price range. If you’re on the search and need guidance for your home financing, reach out to your Flat Branch mortgage banker today!

What Affects Home Value?